Assume the 1-year Treasury rate is 2.25%, and the 1-year British central bank rate is
5.0%. The 6-month
forward exchange rate is $1.8005 per and the spot exchange rate is $1.8295 per If
an American firm's British subsidiary has a project that will retu million for
certain at the end of 6 months, what is this project's present value in dollars?

Question

Assume the 1-year Treasury rate is 2.25%, and the 1-year British central bank rate is
5.0%. The 6-month
forward exchange rate is $1.8005 per  and the spot exchange rate is $1.8295 per  If
an American firm's British subsidiary has a project that will retu  million for
certain at the end of 6 months, what is this project's present value in dollars?

Quizplus · Accepted Answer

The Answer of Assume the 1-year Treasury rate is 2.25%, and the 1-year British central bank rate is
5.0%. The 6-month
forward exchange rate is $1.8005 per  and the spot exchange rate is $1.8295 per  If
an American firm's British subsidiary has a project that will retu  million for
certain at the end of 6 months, what is this project's present value in dollars?

Assume the 1-Year Treasury Rate Is 2